Jones Blair Essay

1331 words - 5 pages

The result of the market research data given analysis from the case documentation are summarized in Exhibits 1 and 2. The professional painter market segment accounts for 50% of sales of architectural coatings is an important segment for JB. The do-it-yourself segment is growing and presently accounts for half of Jones-Blair?s sales. Large Accounts (annual purchase > $50,000) account for 56% of JB?s sales. 10% of these are Non-DFW area and carry JB line exclusively. Retail accounts in Non-DFW area account for 60% of sales. 30% of these accounts with annual purchases of less than $25,000.3. Problem statement Where and how to deploy corporate marketing efforts among the various architectural paint coatings market served by JB in the 50 counties (39 Non-DFW and 11 DFW) in order to maintain its position as a minimum or further improve it.4. Identification of alternatives There are four alternatives appear to be viable solutions to the problem, they are mutually exclusive. Those alternatives are: 1- Do Nothing: Just maintaining the costs and thus keeping the contribution margin at 35%. JB has been successful to date with its existing approach.2- Increasing advertising to expand awareness in DFW Area. Where the current awareness (»20%) is lower than competitors. At least 30% awareness is required among do-it-yourself customers. The 30% can be achieved through investing $350,000 more in corporate brand advertising.3- Reducing prices. Where a price cut of 20% on all paint products to achieve similarity with national paint brands. Thus making JB more competitive.4- Increasing sales force in Non-DFW Area. Where currently there are 8 sales representatives. And the current penetration is 16%. The associated cost of adding one sales rep is $60,000 per year Plus 1% commissions on sales.5. Decision criteria The following decision criteria set was chosen to evaluate the 4 different alternatives suggested in section 4.1- Implementation Cost, what is the cost associated to implement this alternative? 2- Break-even points, where the break even point will be determined by dividing the increase in cost by markup, the result will be in terms of: How much dollar sales should be increased to breakeven this decision? 3-Target Customers, who are the target customers of this alternative? 4-Market share, what is the expected increase in market share? 5-Pitfalls, what are the pitfalls of implementing this alternative? 6. Analysis In this section, the different alternatives identified in section 4 will be evaluated using the decision criteria defined in section 5. At the end of the analysis of each alternative, the marketing strategy will be ranked. Also please refer to Exhibit 3, which presented in it long-term sales projection and growth implications (1996-2003), assuming 4% constant annual growth 1- Do Nothing: Just maintaining the costs and thus keeping same contribution margin: Decision Criteria Evaluation Implementation Cost Same fixed cost Break-even points...

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